The last time Microsoft updated its Office productivity package, one of the company's most reliable moneymakers and one of its most mature and predictable products, the big news was the disappearance of Clippy, the animated helper customers loved to hate.

No such problem this time around. Tuesday's launch of the new Office System included a handful of new products and major changes to existing applications that are intended to position them as part of a broad platform for interacting with corporate data.

New XML (Extensible Markup Lanugage)-based functions in familiar programs such as Word and Excel expand their role as purely local applications. New applications such as InfoPath, an ambitious attempt to apply electronic forms to internal business processes, and SharePoint collaborations tools further blur the distinction between desktop and server.

But Jeff Raikes, vice president of Microsoft's Productivity and Business Services group, insists that XML "plumbing" is beside the point--the real news is that the new Office will buy harried workers a few more minutes in their day. He points to a recent third-party study that concludes that Office 2003 improves efficiency enough to save the average office worker two hours a week. "I think the kind of benefits you see in Office 2003, where information worker productivity can be improved by up to two hours per week, where you can have the kind of cumulative impact where you can pay for the investment in eight months on average--that has to be at the core of what we do," he said.

Raikes spoke with CNET News.com in conjunction with the Office System launch.

Q: There are a lot of new things--XML, digital rights management and other stuff--in Office. What do you think is the big story with the new Office? A: The biggest story, really, is the transformation. People have historically had a narrow view of what Office means to them and their productivity. With Office 2003, and in particular establishing the Office System concept, we're very clearly...signaling a major transformation of what we're doing with Office and our aspiration to really help people in the broad facets of information work.

You're focusing a lot on services and resources that connect to the Office application. Has a limit been reached as far as how much you can do with the application itself? I don't think so. The improvements in Outlook are client improvements. The research service from within Word or Excel--those are ways in which you improve your own personal productivity. Those have direct impact on the user. I guess the only thing I'd hesitate on is if people sort of confuse these things with not being personal. They are very much personal productivity improvements, and they emanate from Word, Excel, PowerPoint.

But you've kept adding features to the Office applications, and studies have shown that something like 95 percent of the features don't get used.

There's a misconception that people focus in on a certain percentage of what they use.

Actually, I don't know of any studies that really show that. The studies we look at...show that if you look across an organization, a very high percentage of all the capabilities get used by some people. What customers wanted and very clearly told us, dating all the way back to the late '80s, was that they wanted a set of tools that could be the same across their organization. So that if somebody's in finance, and they're doing very sophisticated Excel analysis, they'd have access to those capabilities. And if somebody's doing technical documents, they'd have access to those capabilities in Word.

Whether the person in technical documentation is using all those Excel capabilities--that's really not the point. The point is: Can they have capabilities that make their job better and, for reasons of ease of support and training, have the same kind of software across the organization?

What does that say about people's perceptions?
There's a misconception that people focus in on a certain percentage of what they use. In the end, what matters is if we provide users with things that make a difference for them. That's what they care about. And that's what we do in every release of the product.

What's was the motivation for adding all the XML hooks? Common wisdom says this is the only way for Microsoft to keep making money off Office, to use it as a lever into the enterprise.
The whole thing about client boundary, server boundary--frankly that's more interesting to industry insiders than it is to users. At the end of the day, what users really care about is things that help them get their job done more easily. I don't spend a lot of time sitting there saying, 'Office--everybody sees it as a client, now were going to focus on servers.' What I focus on is (that) there are people who are trying to get their jobs done. And as a part of getting their job done, making it easier for them to have access to the information they need for their work--that's important.

The thing that's kind of funny about these claims is that it's kind of like, 'Oh well, now that we have this XML technology, now lets figure out how to expand the Office business using XML.' When the fact is it really comes from the reverse. It comes from really understanding what it is people are trying to do and what would help them do something better. And it turns out that XML is a great way to facilitate access to information...At the end of the day, what matters is not that it's XML doing this stuff but that it does something important for the user.

Let me now take the other side for a second. It becomes worthwhile to think about the technology, when you think about how you can generalize that sort of solution broadly. In software, we like to talk about software architects. And this is an example where some great technical minds really thought deeply about the architectural approach we could use to generalize the ability to support these kinds of solutions. But still, the key thing was there was a set of scenarios--specifically the ability to use Office as the foundation for a set of solutions--that was driving the use of XML.

Does having 700 partners on board for the Office System launch bear that out?
It's certainly a part of it. But I tend to think of it differently. I think the big benefit of having so many partners onboard on Day 1...my excitement about that is it will really help show the rest of the world what's possible...In the end, if it's only 700 partners, I'll be disappointed.

But doesn't the partner support also have value as far as proving to customers that you're not trying to force them into an all-Microsoft software stack?
We are most impactive for our customers when we can offer the ability for a number of partners to enhance our software in a broad number of ways...Helping customers see that potential is a big part of this transformation; it's a big part of why we call this the Office System.

Was there a natural recognition by some of the big technology companies that they'd benefit from tapping into Office as a front end for complex enterprise software?
That's what our partners will tell you. Basically, they'd say they've made significant investments in their enterprise applications, and there is value in helping their users have easier access to that information and an easier connection to these business processes.

What matters is not that it's XML doing this stuff but that it does something important for the user.

The most important thing is that we are trying to think really broadly about information work. That's really the heart of what Microsoft Office System is about...And Windows SharePoint Services was created by the Office team, because we recognize that a combination of a bottom-up and top-down approach to knowledge management was the way for our customers to be the most successful.

Windows SharePoint Services enables grassroots collaboration; you don't have to depend on the IT department or even sophisticated end users who can write macros to be able to collaborate. Going further, with SharePoint Portal Services, you have the ability to make it easy for people to find knowledge within the organization...The combination of bottom-up and top-down approaches is really the best way to improve the sharing of information. The best group in Microsoft to think about those kinds of problems is the Information Worker group, and that's why this kind of work comes from them.

What was behind the decision to add digital rights management to Office?
That's actually an outgrowth of an old group I had called emerging technologies, which had the e-book work. I saw the long-term potential in e-books, but I thought that if you could take the reading potential in e-books and the content security technology there and integrate that into Office, that would be significantly valuable to people for average business content. In Office 2003 and Word, you have the reading view, which uses the ClearType technology the e-books group was behind, and you have Information Rights Management capability, which actually got generalized into making them available broadly as part of Windows Rights Management Services.

Now, what we can do is offer customers the ability to set permissions on their documents. We're not trying to come up with something that's foolproof...It's a mechanism for people to express their intent. That's the way to think about it. If I send you a document, and you want to go over to a copy machine and copy it, you can do that. But if I set the permission to "do not print, copy or forward," I was obviously expressing something to you about my intent for how you would handle that content. In a business environment, given the incredible growth in information, the incredible flow of information that occurs, giving people the ability to express that intent is important.

Sun Microsystems and others have also suggested that it's also a way to lock out competing office applications.
I think that over time, there'll be mechanisms developed to encourage interoperability of security and authentication mechanisms...The primary thing we're doing is giving people the ability to express their intent with information. And I think that competitors like Sun say that because they have not yet been able to produce that kind of value for their customers.

A numbers of Web services providers are counting on Office support to encourage adoption of their services. Was the client side part of what was missing from Microsoft's early Web services offerings with .Net? I don't know that it was missing from the early vision there...Office 2003 is in our view the first and best example of how end users can benefit from XML. Part of the point is to not make that an issue. The user shouldn't have to focus on XML; the user should be able to do something that's important to them. The fact that it's XML that does the plumbing is something we don't feel needs to be made the focus for the user...Programmers do XML.

Now that you've begun this broad effort to establish Office as a platform, where do you go next? We have to always be focused on understanding what we can do to improve information worker productivity. What's next in doing that? Certainly, you can see us making significant investments in areas like real-time communications and collaboration--Office Live Meeting, Office Live Communications Server. Certainly, we're making big investments in what Longhorn will make available to customers. That's the next step, and I know it'll be a big step forward.

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